Twitter's slowest reported growth since going public wiped over a billion dollars off its value yesterday, with shares in the tech giant diving more than 12 per cent by the close of trading last night.
The company’s poor performance does not appear to have been helped by outspoken and controversial US President Donald Trump, who is a prolific user of the platform.
The social network reported revenue of $717m (£574m) in the fourth quarter, a rise of just one per cent year-on-year and missing analyst estimates. Revealing a loss of $167m for the quarter, it also warned escalating competition for digital ad spend from rivals could further impact revenue growth in the year ahead.
Twitter was founded by Jack Dorsey and three others nearly 11 years ago and floated on the New York Stock Exchange in 2013. Its recent slide has taken its market capitalisation down to $12bn and seen it become the focus of takeover rumours.
Its worldwide fame as the favourite mouthpiece of President Trump failed to give the network the expected bump it needs to take flight again.
“We can’t quantify an impact at this point,” insisted Anthony Noto, Twitter’s chief operating officer when asked about the unprecedented Presidential tweets which have led to streams of global news coverage. The high-profile tweeter drove “awareness of Twitter and its powers”, but it failed to do the same for users or revenue.
And the imminent float of Snapchat owner Snap on the New York Stock Exchange was handed a boost by its rival’s results, as bets on its market cap moved the price 10 per cent higher to $28bn, according to trading on IG Group’s grey market.
“In a beauty contest [Snap is] now more attractive than Twitter,” said the spreadbetter’s chief market analyst Chris Beauchamp. “It’s a clear indication of the broader appeal and it’s looking more like Facebook than Twitter.” After an initially dicey IPO in 2012, Facebook stormed back and has gone from strength-to-strength since.
Twitter added two million monthly active users in the three months to the end of December. But Facebook added 72m in the same quarter and while Snapchat has not disclosed such a figure in its securities filings, it already has 158m daily users.
Professor Mark Skilton of Warwick Business School, a digital technology expert, said: “The continued performance failure at Twitter is part of an underlying structural problem and culture at the company and its inability to move beyond its early foundations as a simple microblog. Its 319m user base is simply not engaged enough in direct revenue generation for the company.
"Just like Myspace perhaps Twitter does not what to 'change the formula' for fear of losing its unique simple user experience, but the shareholders and CEO Jack Dorsey are running out of time. These figures will make it a target for a takeover if this slide continues."